FII cap in G-secs, corporate bonds raised by $5 bn each
New Delhi, November 17
The finance ministry Thursday increased the investment limit for foreign institutional investors in government securities (G-secs) and corporate bonds by $5 billion each, a move that will enhance capital flows and increase the availability of resources for Indian corporates.

Google Music to take on iTunes
Los Angeles, November 17
Google Inc has turned on the music at its new online store, aiming to wrest the lead from Apple Inc and Amazon.com Inc in audio entertainment distribution despite the absence of a major record label.

Actress Paula Patton, who stars in the film Mission: Impossible - Ghost Protocol, poses as she participates in the North American debut of the BMW i3 electric concept vehicle (background) and the i8 hybrid-electric concept vehicle at the LA Auto Show in Los Angeles. The show opens to the public on Friday and runs through Nov 27. — Reuters

World stocks hit one-week low
London, November 17
World stocks hit a one-week low on Thursday and German Bunds rose as Spain paid more than at any time since 1997 to sell 10-year debt, sparking fears it may join other euro zone peripheral states in being unable to finance itself.

No bailout for Kingfisher: Minister
Dubai, November 17
Civil aviation minister Valayar Ravi ruled out a public bailout for India's Kingfisher Airlines or any other airline, urging private airlines in India to put their own house in order.

Food inflation eases
New Delhi, November 17
Food inflation eased to 10.63 per cent for the week ended November 5 even as prices of agricultural items, barring onions and wheat, continued to rise on an annual basis.

Debt swap scheme for farmers fails to take off in Punjab, Haryana
Chandigarh, November 17
The ambitious scheme to wean away farmers from indebtedness to private money lenders and commission agents, and to bring them under the ambit of financial inclusion by swapping their debts with bank loans, has failed to take off in Punjab and Haryana.

Negative outlook for most telcos in 2012: Fitch
New Delh, November 17
Fitch Ratings said in a special report released Thursday that the 2012 outlook for most Indian telecommunications operators is negative, as the nationally-owned and six private telcos will continue to suffer operating losses. Fitch expects that the fifth and sixth-largest operators may manage to break even in EBITDA terms in 2012.

PowerMin bans E&Y due to evaluation errors
New Delhi, November 17
The power ministry has banned international consulting firm Ernst & Young (E&Y) from taking up any further assignments in the sector after anomalies in the evaluation of bids for the Sasan project were highlighted in a report by power sector expert PS Bami.

Lupin to acquire Japan's I'rom Pharma
New Delhi, November 17
Pharmaceutical firm Lupin will acquire Japan's I'rom Pharmaceutical (IP) for an undisclosed sum as it looks to expand footprint in the country.

New Delhi, November 17
The finance ministry Thursday increased the investment limit for foreign institutional investors in government securities (G-secs) and corporate bonds by $5 billion each, a move that will enhance capital flows and increase the availability of resources for Indian corporates.

FIIs can now invest up to $15 billion in G-secs and $20 billion in corporate bonds, official sources said.

The investment limit in long-term infrastructure bonds, however, has been kept unchanged at $25 billion.

A notification giving effect to the new FII investment ceilings will be issued by market regulator Securities & Exchange Board of India (SEBI) soon.

"The present enhancement will increase investment in debt securities and help in further development of the government securities and corporate bond markets in the country," the official added.

The decision, which was taken after a review of the macro-economic situation, would enhance capital flows and make additional financial resources available
to the Indian corporate sector, he said.

The official added that the increase in investment limits became necessary as "...Little space was available for further FII investment in G-secs and corporate bonds".

As against the FII investment ceiling of Rs 43,650 crore in G-secs, foreign institutions had invested Rs 41,253 crore as of October 31, 2011.

Similarly, in the case of corporate bonds, oreign institutional investors have invested Rs 68,289 crore (as of October 31, 2011) as against the ceiling of Rs 74,416 crore.
— PTI

New Delhi, November 17
The government is mulling over whether to allow Qualified Foreign Investors (QFIs) to directly buy equities in the stock market, a move aimed at further liberalization of the Indian capital market.

"We’re seriously considering allowing QFIs to invest directly in the stock market," a ministry official said.

A Qualified Foreign Investor is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force standards.

Currently, only overseas high net worth individuals with a minimum net worth of US $50 million and registered as a subaccount of foreign institutional investors are allowed to directly participate in the stock market.

The decision, the official added, would help project India as a global investment centre and attract equity capital from abroad. The move is being considered at a time when stock markets are volatile due to debt problems in several advanced economies, besides concerns like inflation and high interest rates on the domestic front.

There have also been concerns over the flight of foreign capital in recent times. FIIs have pulled out Rs 3,364.9 crore, or $799.8 million, from the equities market in 2011 so far. — PTI

New Delhi, November 17
The finance ministry has given its consent to the draft cabinet note on opening the multibrand retail to foreign investment, an official said.

"The finance ministry has given concurrence to the proposal of the department of industrial policy & promotion (DIPP) on allowing FDI in multibrand retail sector," a senior ministry official said Thursday.

The DIPP had earlier circulated a draft cabinet note to seek inter-ministerial views on the politically sensitive issue. The note was in line with the recommendations of the high level committee of secretaries (CoS), headed by cabinet secretary Ajit Kumar Seth. It had recommended 51% FDI in the sector with several riders. These included a minimum foreign investment of US $100 million. The decision on FDI in the sector has been delayed in view of various concerns. — PTI

Los Angeles, November 17
Google Inc has turned on the music at its new online store, aiming to wrest the lead from Apple Inc and Amazon.com Inc in audio entertainment distribution despite the absence of a major record label.

Google Music, with more 13 million songs, will be integrated with Android Market, the company's online store for smartphone apps and videos as it plays catch-up with its rivals. Apple, Amazon and Facebook have to varying degrees integrated music into their core online and mobile products.

Google Music will allow the Web search leader to do the same by letting consumers access music from various Internet-connected devices and easily share tracks with friends. But analysts said the lack of soundtracks from Warner Music — a major label whose artists include Led Zeppelin and Prince, among others — will limit the appeal of Google Music. "They've got to get that catalog filled pretty quickly," said Mike McGuire, an analyst at industry research firm Gartner. "It's a launch, but it's kind of like a work-in-progress."

Google Music was unveiled Wednesday at a splashy event at the Mr. Brainwash Studios in Hollywood, California. Google has negotiated US deals with three of the four major music companies: Vivendi SA's Universal Music Group; Sony Corp's Sony Music Entertainment; and EMI.

Analysts say selling online music is unlikely to provide much of a lift to Google's revenue. But they say Google needs to be in the market to ensure that its Android-based mobile efforts can match offerings from competitors. — Reuters

London, November 17
World stocks hit a one-week low on Thursday and German Bunds rose as Spain paid more than at any time since 1997 to sell 10-year debt, sparking fears it may join other euro zone peripheral states in being unable to finance itself.

The euro held close to a five-week trough, with concerns about the debt turmoil spreading to commercial banks across the Atlantic and a clash between Germany and France over the ECB's role in tackling the crisis also keeping investors jittery.

Spain sold 3.6 billion euros of a new 10-year benchmark bond at average yields of 6.975% — the highest since the days of the peseta and barely below the 7% level widely viewed as unsustainable for public finances.
— Reuters

Dubai, November 17
Civil aviation minister Valayar Ravi ruled out a public bailout for India's Kingfisher Airlines or any other airline, urging private airlines in India to put their own house in order.

Cash-strapped Kingfisher Airlines, the country's No.2 air carrier by market share, saw its quarterly loss double and cancelled scores of its flights this week.

"There is no bailout scheme or plan by the government for any of the private airline before me," Ravi said Thursday during a private visit to Sharjah in the United Arab Emirates.

Reports this week said that the government had decided in principle to allow foreign airlines to own up to 24 percent of Indian carriers, a move that could throw a lifeline to Kingfisher and its struggling rivals such as Jet Airways and SpiceJet.

"There is a representation by many institutions and people for some kind of FDI. But the government has not taken a decision on it. It all depends on the financial policies," Ravi said.

Kingfisher chairman Vijay Mallya, the liquor tycoon who owns a cricket team and a Formula One racing team, has said the government should allow foreign airlines to buy stakes in Indian carriers.

But Ravi said managements have the main responsibility for the health of their investments. "In totality the managements should also be very careful."

When asked if Kingfisher Airlines was mismanaged, he said: "That’s for him (Mallya) to decide whether he managed it properly or not. If mismanaged, he’ll pay a heavy price."
— Reuters

New Delhi, November 17
Food inflation eased to 10.63 per cent for the week ended November 5 even as prices of agricultural items, barring onions and wheat, continued to rise on an annual basis.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 11.81 per cent in the previous week ended October 29. The rate of price rise of food items stood at 11.4% in the same week of the previous year.

According to data released by the government on Thursday, onions became cheaper by 22.89% year-on-year, while wheat price were down 3.63%. However, all other items became more expensive on an annual basis during the week under review.

While vegetables became 27.26% costlier, pulses grew dearer by 14.44%, milk by 10.74% and eggs, meat and fish by 11.73%. Fruits also became 5.99% more expensive on an annual basis, while cereal prices were up 3.53%.

Inflation in the overall primary articles category stood at 10.39 per cent during the week ended November 5, as against 11.43 per cent in the previous week. — PTI

Chandigarh, November 17
The ambitious scheme to wean away farmers from indebtedness to private money lenders and commission agents, and to bring them under the ambit of financial inclusion by swapping their debts with bank loans, has failed to take off in Punjab and Haryana.

The recent data released by the state level bankers’ committee for the two states, reveals that this scheme has not made much headway in the two states. It was recently that most banks have enhanced the limit of loan that can be swapped, from Rs 50,000 to Rs 1 lakh. However, in spite of this and high rural indebtedness in both states, farmers seem to have not taken to the scheme, with banks in Punjab achieving just 15.26% of the target and Haryana achieving just 31% of the target set for it to swap the farmers debts.

The data also reveals that in both states it is mainly the public sector and regional rural banks that have initiated the scheme. In Haryana, public sector banks have achieved 46% of the target set for them, while regional rural banks have achieved 30% of the target set for them under this scheme. As against a target of Rs 403.49 crore that has to be extended as loans by swapping debts of farmers, banks in Haryana have managed to disburse just Rs 125.01 crore under the debt swap scheme.

Similarly, in Punjab, as against a target for disbursing Rs 586.80 crore under this scheme (till September 2011), banks have disbursed just Rs 89.57 crore till September. Both cooperative and private sector banks in these states have failed to implement this scheme, Sources in the banking sector told The Tribune that the main reason for the poor response to the scheme was that farmers were asked to seek certificates from money lenders, to be furnished to the banks, stating the exact amount of debt that had to be swapped with a bank loan.

“Farmers are reluctant to get these certificates from moneylenders and the latter, too, are unwilling to give these certificates. The scheme would become much viable if banks take self-attested affidavits from these farmers instead of certificates from their creditors,” said a senior Punjab National Bank official.

The Air Transport Association, the leading US trade group for major carriers, sought an injunction in US District Court for the District of Columbia to stop financing arranged by the Export-Import Bank of the United States.

The Ex-Im bank is an independent agency that finances sales of American exports to international purchasers.

Airlines contend low-interest credit assistance to foreign carriers violates federal law. They also say that such financing puts them at a competitive disadvantage and that Air India's losses and management troubles should disqualify it from financing.

Air India ordered up to 50 long-range Boeing jets worth about $6 billion in 2005.

Foreign carriers, the US airlines also contend, have added capacity and gained market share on international routes to and from the United States.

"We believe it’s time for Ex-Im Bank to revise its practices and consider the impact on the US airline industry and its employees," said ATA chief executive Nick Calio.

"We repeatedly have sought additional information about the timing and details of the Air India delivery, but the Ex-Im Bank has refused to provide it. ATA has no choice but to seek judicial intervention in order to prevent our members from suffering irreparable injury," Calio said.

New Delh, November 17
Fitch Ratings said in a special report released Thursday that the 2012 outlook for most Indian telecommunications operators is negative, as the nationally-owned and six private telcos will continue to suffer operating losses. Fitch expects that the fifth and sixth-largest operators may manage to break even in EBITDA terms in 2012.

"Although the high level of competition is leading to very weak financial performance for most Indian telcos, Fitch believes that the credit outlook for the top four telcos is stable," said Nitin Soni, associate director in Fitch's Asia-Pacific telecoms, media & technology team. "The credit metrics of the four largest telcos should improve in 2012. However, all operators remain exposed to significant regulatory risks," he added. — Reuters

New Delhi, November 17
The power ministry has banned international consulting firm Ernst & Young (E&Y) from taking up any further assignments in the sector after anomalies in the evaluation of bids for the Sasan project were highlighted in a report by power sector expert PS Bami.

"We issued a ‘show cause’ notice to E&Y on their consultancy work on the Sasan project based on the Bami committee report... It was almost two months back... It has nothing to do with the CAG report on the matter," a ministry official said.

State-run PFC has already banned the global consulting firm after its internal committee found some discrepancies at the time of handing over the Sasan UMPP to the successful bidder. — PTI

New Delhi, November 17
Pharmaceutical firm Lupin will acquire Japan's I'rom Pharmaceutical (IP) for an undisclosed sum as it looks to expand footprint in the country.

The firm's Japanese subsidiary Kyowa Pharmaceutical Industry Co has entered into an agreement with I'rom Holdings (IH), an integrated healthcare provider to acquire up to 100% of the outstanding shares of its subsidiary, IP, Lupin said.

IP is a specialty injectables company and had clocked a revenue of 5.3 billion yen in the 2010-11 fiscal.

"So far we’ve been strong in the oral segment in Japan. The acquisition will get us into injectables. We expect IP's sales to be nearly $75 million for the financial year ending March 31, 2012," a Lupin executive said. — PTI